Business

Gold exports slide on soft prices

Mupane Gold processing operations PIC- Galane Gold Ltd
 
Mupane Gold processing operations PIC- Galane Gold Ltd

The lower value of exports as at November, as revealed recently by the Bank of Botswana, was in spite of production increases by the country's sole mine, Mupane, which ramped up output throughout the year from its main deposit and surrounding leases.

While the depletion of a key deposit forced Mupane's production down 32 % in the year up to September 2013 when compared to the same period in 2012, figures show quarterly improvements in 2013 from 7,430 ounces in March to 9,941 in September.

The mine's latest sales figures suggest that weaker gold prices on the global market in 2013 wiped out potential profits from the ramp up in production. Spot gold opened 2013 at US$1,700 per ounce and closed at US$1,200, as investors shed the safe haven metal in light of improving global economic prospects.

Mupane sales figures show that in the third quarter of last year, the mine sold 10,310 ounces at an average price of US$1,343 per ounce compared to 11,473 ounces at an average US$1,686 per ounce in the third quarter of 2012.

The mine's data also shows that average gold prices per ounce fell from US$1,630 in the first quarter of 2013 to US$1,343 in the third. The trend is also captured in a Bank of Botswana (BoB) index tracking monthly gold prices, which dropped from 1,673 points in January to 1,279 points in December.

This year, Mupane directors have announced plans to focus on three deposits that include an underground operation, as well as mining of tailings and low-grade stockpiles for ore feed requirements.

'This mine plan is subject to change according to the prevailing gold price whereby the company will adopt the appropriate plan for that prevailing gold price environment,' directors say in a recent commentary.